SINGAPORE (Reuters) – Singapore’s competition watchdog said it had reasonable grounds to suspect competition had been infringed by Uber Technologies Inc’s deal to sell its operations in Southeast Asia to rival ride-hailing firm Grab.
In a rare move, the Competition Commission of Singapore (CCS) has begun an investigation into the deal and proposed interim measures that will require Uber and Grab to maintain their pre-transaction independent pricing, the watchdog said in a statement on Friday.
The proposal also requires Uber and Grab not to take any action that might lead to the integration of their businesses in Singapore, a move likely to pose a major hurdle to the U.S. company’s attempt to improve profitability by exiting the loss-making Southeast Asian market.
It is the first time the commission has issued interim measures on any business in the country.
“To address consumer concerns, we have voluntarily committed to maintaining our fare structure and will not increase base fares. This is a commitment we are prepared to give the CCS, and to the public,” Lim Kell Jay, head of Grab Singapore, told Reuters in a statement.
Uber was not immediately available for comment.
Uber and Grab announced the deal on Monday, marking the U.S. company’s second retreat from an Asian market.
Under the deal, Uber will take a 27.5 percent stake in Grab, which is valued at around $6 billion, and Uber CEO Dara Khosrowshahi will join the Singapore-based company’s board.
CCS proposals also require both Grab and Uber not to obtain from each other any confidential information including pricing, customers and drivers.
The two firms will be given an opportunity to make written representations to the CCS upon receipt of the proposed interim measures, it said.
Singapore has a voluntary merger notification regime, and CCS has yet to receive the notification from Uber and Grab as of Friday, although the companies have indicated their intention to file a formal merger notification, CCS said.
“We had engaged with the CCS prior to signing and continue to do so,” Lim said.
“We have informed the CCS that we are making a voluntary notification no later than 16 April 2018 to continue to cooperate and engage with the CCS,” he added.
The deal is the industry’s first big consolidation in Southeast Asia, home to about 640 million people, and is widely expected to give Uber more firepower to focus on other markets including India, as it prepares for an IPO in 2019.
Uber lost $4.5 billion last year and is facing fierce competition at home in the United States and across Asia, as well as a regulatory crackdown in Europe. The firm has invested $700 million in its Southeast Asian operations.
(Reporting by Miyoung Kim, additional reporting by Fathin Ungku; Editing by Himani Sarkar, Jacqueline Wong and Gareth Jones)